June 29, 2015 – OPIS
OPIS North America LPG Report
(pgs 7-8)
NGL prices are expected to advance through the remaining six months of 2015, but gains are expected to remain limited. Mt. Belvieu ethane, currently just under 19cts/gal on a spot settlement basis today, is projected to hit just over 21cts/gal by December 2015, Friday's OPIS NGL Forwards Report shows.
In the meantime, ethane's story is really that of natural gas. July natural gas futures settled at $2.773/MMbtu on Thursday. The December contract settled at $3.106/MMbtu, reflecting a modest bullish outlook for ethane. Kelly Van Hull, manager with analytics firm RBN Energy, said that she expects ethane prices and the forwards curve to remain flat until the additional demand surfaces.
For the full report, visit: www.opisnet.com
The normal butane market saw July futures called at 56.875cts/gal on Friday. December contracts finished at 66.4375cts/gal. The market's contango is underpinned by an export market seeing solid but not spectacular volume, Van Hull said. That's because export arbs are "just clearing transportation," she said.
The petchem market has had some demand for normal butane, but that appears to be approaching its limit. Van Hull said that the market for butadiene, a byproduct of normal butane cracking, is flush. And that's causing petchems to keep a lid on normal butane cracking. She predicted that if normal butane cracking exceeds 150,000 b/d, that would flood the butadiene market.
